Poor performance

Poor performance

Tuesday 10 June 2008 19.01 EDT
First published on Tuesday 10 June 2008 19.01 EDT

Had Gordon Brown listened to Tony Blair he could now be claiming that child poverty is in retreat - although not because the former prime minister had better policies. When the two agreed to halve the rate by 2010, Mr Blair preferred a woolly measure of deprivation that would be easier to shift, a measure which - as new analysis yesterday showed - is indeed declining. But the then chancellor held out for a tough target based on hard financial facts about how far the poor are lagging behind. Mr Brown showed bravery in fashioning this rod for his own back. Yesterday he felt its full force.

The official tally of poor children rose, albeit slightly, for the second year in a row. There was even worse news on pensioners, as well as a general widening of the income gap. The increase in poverty is modest compared to the progress made over the decade, but it taints Labour's proud record. The blow is all the harder for a government struggling to prove that it has purpose. If the Brown administration has a defining mission it is extending opportunity to the poorest. That theme emerged, for instance, in Alan Johnson's speech on deprivation and health on Monday and in Ed Balls's announcements on failing schools yesterday. But if, as the new figures suggest, economic inequalities are growing then worthwhile measures to tackle the social consequences could be imperilled.

Two warnings emerge from the new data, which covers 2006-07. First, that small sums can make all the difference to families struggling to make ends meet. That hardly needs saying after the 10p tax row. The main reason why 200,000 more pensioners slipped below the breadline was the withdrawal off a one-off council tax rebate, announced before the 2005 election and worth just £4 per week. The main factor pushing children into poverty was similarly modest, a small rise in inflation. When price rises accelerate, family benefits are adjusted only after a delay, causing hardship in the interim. Living costs are now picking up again pointing to fresh problems in the coming years.

In the end, though, benefit rates are adjusted, so inflation should come out in the wash. But there is no automatic corrective when political eyes drift away from the problem. The second warning supplied by yesterday's figures is that hardship does not merely fester if ignored, but gets positively worse. Earnings creep up faster than prices, and those dependent on benefits slip further behind - unless something is done. For many years the government did act, which is why the proportion of children stuck in poverty for years on end has declined since 1997 from 17% to 11%. But at the start of its third term, divided over the leadership, Labour lacked focus. Tax credit increases were miserly, and the impressive initial drive to sign people on to the pension credit gave way to complacent drift. The new figures show the result. On child poverty, at least, ministers are now belatedly doing better. This year's budget reformed housing benefit, to make work pay for low-earning parents. While welcome, that change will not show up in the figures for another two years. By then Labour thinking may be irrelevant.

The Conservatives exploited ministerial discomfort yesterday, but remain vague about what they would do. David Cameron says poverty is not just about money, which few dispute. But his party's record in office is appalling. If the benefit system it bequeathed had been kept, 1.7 million more children would now be poor. The onus is on him to prove his words are not code for downplaying the problem of income. Mr Cameron may legitimately want to define poverty in his own way. But he should also pledge to avoid backsliding on the existing measure. The latest poverty count represents a serious failure for Labour. The Conservatives still need to show that they really regard it as a failure at all. By making firm commitments they could kick-start useful competition about who is best placed to cut this shameful tally.